Solutions Straight Ahead
Experts are sounding the alarm about the impact of COVID on women’s retirement security. Nearly 40% of women had some sort of life event during the pandemic that has impacted them financially.
Fortunately, momentum is growing among policymakers for concrete measures that can ease women’s financial concerns. And life insurers are leading the charge.
Last week I discussed those measures during part of a Yahoo Finance panel moderated by Alexis Christoforous. Together with Joanna Smith-Ramani of the Aspen Institute and Adrienne Schweer of the Bipartisan Policy Center, we examined the many obstacles women face when it comes to saving for retirement. They include:
- Women carry 2/3rds of the student loan debt in America.
- Women reach peak salary levels 10 years earlier than men, yet they live longer so they need more in retirement.
- Two-thirds of Latinas work for employers that don’t sponsor retirement savings plans. Almost three-fifths of Black women ages 65+ have no retirement income from savings and assets.
Policymakers are taking note. In 2019, the life insurance industry helped win passage of the SECURE Act. The first significant retirement legislation passed in a decade, SECURE helped more people gain access to retirement plans. This year, new bipartisan legislation under consideration is aimed at closing the retirement savings gap. Among its provisions: allowing employers to “match” contributions to 401(k)s for employees paying back student loans.
Our panelists also highlighted how women disproportionately take time off to care for family members, and how women can lose over $300,000 in wages, Social Security benefits, and retirement plan savings over a lifetime.
Many legislative proposals are being considered regarding paid family and medical leave. The best ideas build upon the existing strong private paid leave system. The private sector already provides paid medical leave benefits to 47% of full-time workers. Indeed, the life insurance industry has successfully delivered paid leave benefits for decades with a proven track record of speed and efficiency.
Women’s financial challenges existed before COVID-19. And there are no quick fixes. But by encouraging leaders to keep these issues as priorities, life insurers are leading the way toward sensible and effective measures that will help more women retire with financial security.